Ensign pair's shares dive

The stock market reacted to today's merger of Lloyd's insurers Limit and Wellington Underwriting by slashing the share prices of both.

Wellington, the junior partner, fell 10p to 71p and Limit was down 3 1/2p at 78p. When they revealed talks last month the shares were 100p and 96p respectively.

The two firms are to form Ensign Underwriting by offering 91 Ensign shares for every 100 Wellington. Limit shares will simply be renamed Ensign. It will be the biggest underwriter in the Lloyd's market, and will save £26m a year by merging overlapping syndicates. As these syndicates are half-owned, Ensign will gain £13m a year.